November 19, 2007
Dean Baker
The Guardian Unlimited, November 19, 2007
See article on original website
Barack Obama has been running for president full-time for nearly a year. While he has impressed millions of people across the country and managed to garner substantial support for his candidacy, he is still mired in second place in the polls. Second place does not win nominations, so with time running out, Obama is getting a bit desperate.
This is the only way to understand his attack on Hillary Clinton for not having a plan to close Social Security’s projected shortfall. As Senator Clinton rightly pointed out, the projected problems with Social Security are distant and relatively minor. There is no reason that she needs to develop a plan for plugging a hole that is not projected to arise until 2046, almost thirty years after the latest date that she can leave the White House.
Obama’s own plan called for raising the income cap on the payroll tax, which would be a modest tax increase on upper middle income workers, and a very substantial tax increase on the highest paid workers. Proposing tax increases is not generally a smart way to win elections, but Obama clearly hoped to be rewarded with positive news stories and editorials, and praise for his courage from the print and broadcast pundits. His plan did earn him some praise from these quarters, but not enough to raise him from his distant second place standing in the polls.
While Obama’s attack can be dismissed as simply bad political judgment, the deeper issue is that attacking Social Security has so much resonance with the media elite. This group has been blatantly ignoring and/or misrepresenting the facts in its attacks on Social Security for almost two decades. They have used their power over the news to force politicians to respond to their agenda, praising those who advance their Social Security crisis story and damning those who try to keep the projections in perspective.
Politicians who refuse to say what we should do with Social Security are not dodging a tough issue, they are simply being realistic. We don’t know what the world will look like in 2040, 2050, and 2060. Under very plausible assumptions, Social Security will remain fully solvent right through these decades with no changes whatsoever. However, even if the program needs to be changed to maintain solvency, none of us has great insight as to how those who have not yet entered the workforce will opt to divide their lives between work and retirement.
If it is necessary to make up a Social Security shortfall, will people in 2050 prefer to retire later, get lower benefits, or pay higher taxes? We don’t have any real basis for answering this question. Furthermore, the people alive in 2050 will not care how we did answer the question. The country will almost certainly reshape the Social Security program at least once before 2050 regardless of what we might choose to write into law in the next few years.
Social Security is an issue where good policy is also good politics. The best thing that progressive politicians can do for the program is to use their megaphone to counter the scare stories. After hearing a steady drum beat of stories about Social Security’s pending bankruptcy, tens of millions of people question whether they will ever see the benefits they have earned. These people must be assured that the program faces no major financial threats, only political threats from those who want to cut and/or privatize Social Security.
It is unfortunate that much of the elite media must be included on the list of Social Security’s opponents. This makes the necessary public education effort far harder than would otherwise be the case. On the other hand, the influence of the elite media is dwindling rapidly. Newspaper readership is plummeting, as is the audience of the network newscasts. People are increasingly turning to the Internet for their information and finding a much broader range of sources.
The Internet was crucial in defeating President Bush’s effort to privatize Social Security in 2005 and it will undoubtedly play an extremely important role in combating any future efforts at privatization. As the importance of the Internet grows and the traditional media shrinks, time is clearly on the side of those who want to protect Social Security.
It is unfortunate that Senator Obama fell in with the bad guys on this one. If he wants to gain ground on Clinton he will have to find a more legitimate issue.
Dean Baker is the co-director of the Center for Economic and Policy Research (CEPR). He is the author of The Conservative Nanny State: How the Wealthy Use the Government to Stay Rich and Get Richer (www.conservativenannystate.org). He also has a blog, “Beat the Press,” where he discusses the media’s coverage of economic issues. You can find it at the American Prospect’s web site.
